Canadian Dollar: USD/CAD (CAD=X) remains in dovish mode and policymakers have acknowledged that the economic slowdown was deeper than the bank expected
USD/CAD posted gains for a second successive week, and the pair punched above the 1.35 line for the first time in 2019. This week’s key event is Canadian GDP. Here is an outlook for the highlights of this week and an updated technical analysis for USD/CAD.
There were no surprises from the Bank of Canada, which maintained the benchmark rate at 1.75%. The rate statement was dovish, reinforcing the view that the BoC will put a freeze on rates, which could last until 2020. The bank noted that the oil price decline had reduced investments and exports in the energy sector, and investment and exports in other sectors had been dampened by trade tensions and the slowdown in the global economy.
In the U.S, last week’s numbers were positive. Durable goods orders climbed 2.7%, crushing the estimate of 0.7%. Core durable goods orders gained 0.4%, marking a 9-month high. This was followed by a strong initial GDP release of 3.2% in Q1, well above expectations. This was much stronger than Final GDP for Q4, which came in at 2.2%.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 1.33.
The projected upper bound is: 1.36.
The projected lower bound is: 1.33.
The projected closing price is: 1.35.
During the past 10 bars, there have been 4 white candles and 5 black candles for a net of 1 black candles. During the past 50 bars, there have been 25 white candles and 24 black candles for a net of 1 white candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 69.7508. This is not an overbought or oversold reading. The last signal was a sell 1 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 58.29. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 83 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 90. This is not a topping or bottoming area. The last signal was a sell 0 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 6 period(s) ago.
Rex Takasugi – TD Profile
FOREX CAD= closed up 0.000 at 1.345. Volume was 100% below average (consolidating) and Bollinger Bands were 36% narrower than normal.
Open High Low Close Volume___
1.345 1.346 1.345 1.345 127
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1.34 1.33 1.32
Volatility: 6 7 7
Volume: 80,188 107,114 93,091
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
FOREX CAD= is currently 1.8% above its 200-period moving average and is in an upward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of CAD= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on CAD= and have had this outlook for the last 1 periods.
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